The current “panoply” of significant catastrophe loss events affecting the insurance and reinsurance market are expected to drive structural change in products, as well as continued upwards momentum in pricing, according to Kroll Bond Rating Agency (KBRA).
Your search for “"structural change"”
News & Analysis Results
Mergers & acquisitions in the reinsurance market are set to continue, according to a new report from Fitch Ratings on the reinsurance market. But scale, while sure to help some under-pressure reinsurers, may not always be the answer to the real issues causing structural change.
Two more of the big Bermudian reinsurance players have announced a merger. AXIS Capital and PartnerRe have agreed to combine to form an $11 billion reinsurance player, which they hope will strongly position them to respond to structural changes in the market.
The reinsurance market is moving beyond simply being soft into something “more structural”, as low pricing and competition from ILS and alternative capital continue to threaten the traditional reinsurance model, according to Fitch.
The global reinsurance industry is looking at a period of structural change and reduced margins, as the industry comes to terms with the new environment of excess capacity, both traditional and alternative, higher competition and lower rates.
Australian primary insurer Suncorp has restructured its reinsurance program at the July 1st renewals, adding a new A$400 million Aggregate Excess of Loss (XoL) cover, in place of its previous natural hazards aggregate and stop-loss protections.
Absent some kind of government intervention that forces a raft of claims into the insurance and reinsurance industry, David Flandro, Managing Director of Hyperion X Analytics, believes that there is no reason to expect the industry loss from Covid-19 will reach the levels of a large catastrophe loss year.
While the immediate economic and financial market impacts of the Covid-19 coronavirus pandemic have ramifications for investor appetite, there are longer-term reasons that ILS funds could face challenges when it comes to accepting new inflows while the virus remains prevalent.
The collateralized insurance and reinsurance sidecar market is expected to remain active through the rest of 2019, as sponsors look for investors and capital to support their capacity needs going into the key January 1st 2020 renewals, according to Aon Securities.
Panellists at the annual Munich Re insurance-linked securities (ILS) roundtable event in Monte Carlo today said that the ILS market is ready and able to go deeper into reinsurance.